Ilkowitz v. Durand

Background

Jeniece Ilkowitz and Adam Ilkowitz sued several defendants over the March 9, 2015 sale of a residence. Their complaint asserted claims under the Residential Lead-Based Hazard Reduction Act and state-law claims for negligent misrepresentation or concealment, fraud, breach of contract, and negligence. Their only claim against The Judicial Title Insurance Agency LLC was negligence. They alleged that Judicial Title should have discovered and disclosed lead-based paint hazards at the property.

On March 27, 2018, the court granted Judicial Title summary judgment on the Ilkowitzs’ negligence claim and the Durands’ cross-claim for contribution. Summary judgment is a decision resolving a claim when the court finds that the evidence does not require a trial. The court also granted Judicial Title’s motion for sanctions against the Ilkowitzs’ attorney, Jean-Claude Mazzola, under Federal Rule of Civil Procedure 11.

The earlier ruling explained that, under New York law, Judicial Title’s liability was limited to title defects. The Ilkowitzs had not alleged a title defect; instead, they claimed that Judicial Title should have warned them about lead paint. The court found that Judicial Title had no duty to search for or disclose lead-based paint hazards. It also found that the negligence claim violated Rule 11(b)(2) because it was not supported by existing law or a nonfrivolous argument for changing the law. The court denied sanctions directly against the Ilkowitzs because Judicial Title had not shown that they knew the filing was wrongful, and because their counsel said they relied on him for advice about the claim’s validity.

Fee Request and Objections

Judicial Title sought $56,857.57 in attorneys’ fees and costs resulting from the Rule 11 violation. The request included approximately $56,368 in attorneys’ fees and approximately $490 in expenses; the opinion separately states that Judicial Title’s costs totaled $439.54. Judicial Title’s lawyers billed 157.4 hours for work on the summary-judgment and sanctions motions and the related fee application.

Mazzola argued that the requested hourly rates and hours were excessive. He identified block billing, vague time entries, attorney time spent on clerical and administrative tasks, and time spent defending cross-claims brought by other defendants. He also challenged $285.43 in Westlaw research costs. The plaintiffs proposed an award of $14,182.50 in fees and $154.11 in costs.

Analysis

The court applied the lodestar method, which calculates a fee by multiplying a reasonable hourly rate by a reasonable number of hours. It considered the rates Judicial Title agreed to pay: $525 for senior partners Adam L. Bailey and Colin E. Kaufman, $450 for associate Scott J. Pashman, $350 for associate Danny Ramrattan, and $100 to $125 for paralegal or administrative work. The court rejected the plaintiffs’ proposed rate reductions, stating that most of the billed hours fell within or below the range they cited and that their other cases were too old to establish current market rates. The court stated that any concern about excessive rates was adequately addressed by the overall reduction.

The court held that Judicial Title could recover reasonable fees for preparing its sanctions motion and fee application. The plaintiffs had received notice of the planned sanctions motion but did not withdraw the claim during the required period for doing so. The court nevertheless found substantial problems with the hours requested. It noted that counsel billed about 74 hours preparing a 34-page sanctions motion but only about 15 hours preparing a 45-page summary-judgment motion. It also found block billing, vague entries, charges for administrative work, and fees related to defending other defendants’ cross-claims. The court stated that Judicial Title had not shown that it could recover from the plaintiffs fees incurred defending claims brought by other parties.

Because the request contained multiple substantial billing problems, the court imposed a 50% across-the-board reduction rather than making item-by-item findings about every billing entry.

Disposition

Judge Gardephe awarded The Judicial Title Insurance Agency LLC $28,428.79 in attorneys’ fees and costs against Jean-Claude Mazzola and Messner Reeves LLP. Mazzola and Messner Reeves LLP were made jointly and severally liable, meaning each was responsible for the entire amount, subject to any later allocation between them. They were ordered to pay Judicial Title by June 30, 2020. The Clerk of Court was directed to close the case.